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Question - Quantum currently allocates their repair and utility dollars to their assembly, fabricating, and finishing department using the direct method of service center cost allocation. Repair dollars are allocated using direct labor hours and utility dollars are allocated using square footage
DLH Repair
Sq. ft Utilities
Assembly
Fabricating
Finishing
Total
Costs
$8,000,000
$10,000,000
$4,000,000
$3,500,000
$4,500,000
$30,000,000
Repair
5,000
15,000
6,000
10,000
9,000
45,000
Utilities
7,000
25,000
30,000
117,000
a) Calculate the amounts to be allocated to the production departments using the direct method.
b) Calculate the amounts to be allocated to the production departments using the step method.
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